Palo Alto Stock Snags Multiple Price Target Hikes Ahead Of Q2 Print: Retail Positioned To Take Advantage Of ‘Textbook-Perfect Uptrend’

Palo Alto Networks, Inc. (PANW) shares received a trio of price-target boost ahead of the company’s fiscal year 2025 second-quarter results. The California-based cybersecurity company is scheduled to release its quarterly results after the market closes on Thursday.

Previewing the results, Wedbush analyst Daniel Ives maintained an ‘Outperform’ rating for Palo Alto stock. He upped the price target to $225 (pre-split) from $200. The updated price target suggests a potential for a nearly 15% upside from current levels.

Seeds Of Growth In Place

Ives said he does not expect “major fireworks” with the second-quarter print. He expressed optimism over the “seeds of growth” that are now in place for an important second half to take advantage of the threat of elevated and sophisticated cyber threat activity.

The analyst looks forward to seeing strong cybersecurity deal activity across enterprises as the company continues to lay the foundation for its “platformization” approach heading into the second half of the current fiscal and the next year. 

“PANW continues to be one of our favorite cyber security names to own over the next 12-18 months as the company generates a more stable pipeline of “platformization” deals with cloud penetration,” he added.

Q2 Expectations

Palo Alto is coming off a strong first quarter, when key metrics exceeded expectations. Wall Street analysts currently model second-quarter adjusted earnings per share (EPS) of $0.78 and revenue of $2.24 billion. This marks an improvement from the year ago’s $0.73 and $1.98 billion, respectively. 

The guidance issued in late November calls for non-GAAP EPS of $1.54 to $1.56 and revenue of $2.22 billion to $2.25 billion.

Ives said the Wall Street numbers and the guidance are beatable.

In the first quarter, non-GAAP EPS climbed 13% YoY and revenue rose 14%. Remaining Performance Obligation (RPO), a key metric, increased 20% to $12.6 billion and next-generation security annual recurring revenue (ARR) was up 40% to $4.5 billion.

The Fly reported that Rosenblatt Securities increased the price target to $235 from $212.50 and KeyBanc Capital Markets upped it to $240 from $217. Both firms have bullish ratings on the stock. 

A retail watcher said the stock is experiencing a textbook-perfect uptrend and called it a “lifetime holding stock.”

Another user suggested buying the stock ahead of the print.

Palo Alto stock traded marginally higher at $196.58 in early trading. The stock hit an all-time high of $207.24 on Dec. 17, immediately after it began trading on a split-adjusted basis. 

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